The market, though hitting new intraday eight-week lows, moved mostly sideways on a closing basis in the week ended Thursday. Spot March eked out a two-point gain to 72.91 cents after falling to 72.22 cents. March came into the calendar week having completed a technically negative outside-range-week reversal to the downside. Then the downward sloping nine-day moving average crossed below the upward slanting 40-day average on Tuesday.

The lead contract closed below its 50-day moving average three times in a row and in five of six sessions. Open interest for the whole market fell 3,394 lots from a week ago to 185,756.

The market shrugged off a report showing U.S. all-cotton export sales for 2009-10 surged to a new marketing year high of 440,700 running bales during the week ended Jan. 7. This was the second time in the last three reporting weeks that export sales have hit a new crop year high.

All-cotton shipments jumped to 203,400 running bales, up 50 percent from the previous week 35 percent from the prior four-week average. To achieve the export forecast, however, shipments still need to average roughly 240,400 running bales a week.

The lead futures contract broke during the reporting week for export sales from a new 16-month high of 76.77 cents on Jan. 4 to the low of 72.56 cents on Jan. 7. Prices then hit the outside-week low of 72.43 - the prior low for the move -- on Jan. 8.

China booked 225,800 running bales of upland and Pima, 51 percent of the sales to 20 destinations. However, the impact of tighter monetary policy subsequently was reported to have undermined buying confidence.

News that China's central bank tightened banks' reserve requirements by half a percentage point rippled through surprised world markets amid concerns the move may dent Chinese demand and slow global economic recovery. And the People's Bank of China raised the yield it offers on its one-year bills, the second increase in interbank markets in a week.

Still, the latest sales data reinforced thoughts that exports in the long run may exceed the USDA forecast if global economic recovery remains on track.

Updated supply-demand estimates bombed the grains - corn locked limit down - but were largely neutral for cotton. U.S. production slid 191,000 bales from last month to 12.4 million, down 3.3 percent from last season. Domestic mill use and exports were unchanged at 3.4 million and 11 million bales, respectively.

Ending stocks fell 200,000 bales to 4.3 million, down from beginning stocks of 6.34 million bales. The average farm price forecast of 57 to 64 cents was raised a penny on the lower end, nudging the midpoint up 50 points to 60.50 cents.

The U.S. stocks-to-use ratio fell 1.4 percentage points from a month ago to 29.9 percent. This is down from last season's 36.7 percent and the lowest since 2005-06 when it was 25.9 percent.

Production in the West Texas Plains declined 140,000 bales from the December estimate to 4.420 million, still up 23 percent from last season's 3.593 million bales.

The High Plains crop fell 120,000 bales to 3.78 million, up from 2.918 million bales last season, and the adjoining Rolling Plains output slipped 20,000 bales to 640,000, down from 674,600 bales in 2008-09.

World estimates were virtually unchanged on the month, with ending stocks down 90,000 bales or only 0.17 percent to 51.72 million. Production rose by 500,000 bales to 32 million for China and fell 300,000 bales to 23.5 million for India.

Small downward world adjustments included 190,000 bales to 60.93 million in beginning stocks, 10,000 bales to 102.71 million in production, 150,000 bales to 114.36 million in mill use and 90,000 bales to 51.72 million in the carryout.

The world stocks-to-use ratio remained at 45.2 percent, against 45.3 percent a month ago and 54.8 percent last year. This would be the lowest ratio since 1994-95 when it was 37.8 percent.

Production increases for China and Brazil offset decreases for India, the United States, Australia and others. Consumption declined marginally owing to reductions for Japan and Russia. Imports dipped 230,000 bales to 33.65 million.

The global carryout is expected to fall 15 percent from the beginning level. World stocks outside China of 34.2 million bales are forecast at the lowest since 2003-04.

In Texas, a 16 percent decline from last year to 5.4 million acres seeded statewide for the 2010 winter wheat crop raised prospects that cotton may be planted on some acres formerly devoted to the small grain.

This is the fourth largest year-to-year decrease on record and the lowest planted area since 1973. Texas growers planted 6.4 million acres in winter wheat for the 2009 crop and 5.8 million acres for the 2008 crop.

Wheat producers in the Texas High and Rolling Plains seeded 4.155 million acres, down 748,000 acres or 15 percent from the planted area for the 2009 and 320,000 acres or 7 percent from the 2008 acreage.

Meanwhile, trend-following funds pared their net long futures-options position by 6,370 lots to 47,274 during the week ended Jan. 5, according to supplemental traders-commitments data released by the Commodity Futures Trading Commission.

That was the largest weekly trend-followers change in either direction in seven reporting weeks, since they boosted their net longs by 9,337 lots to 52,920 during the week ended Nov. 24.

Index funds nudged their net longs up a marginal 123 lots to 80,336 and small speculators trimmed theirs by 856 lots to 12,309. Commercials covered 6,541 shorts and added 808 longs to reduce their net shorts by 7,349 lots to 139,919.

DUANE HOWELL is retired farm editor of The Avalanche-Journal. Letters can be sent to P.O. Box 16347, Lubbock 79490, or faxed to (806) 799-7462. His e-mail address is duane.howell@sbcglobal.net.